Firms see a boost in the Budget

ALMOST half of London's small and medium-sized firms believe the Budget will boost their business growth, despite concerns that higher National Insurance contributions will hit employment costs.

A poll of 250 companies on Wednesday night by accountants PricewaterhouseCoopers found 45% broadly in favour of Chancellor Gordon Brown's measures.

Most popular was the 10% taper relief of capital gains tax for business assets held for two years. Also welcomed was the CGT exemption for companies disposing of substantial shareholdings.

However, business turned on the Chancellor for increasing employers' NI contributions from 11.9% to 12.9%. Almost three-quarters of firms said it was their least favourite Budget measure.

Keith Mansfield, tax partner at PricewaterhouseCoopers, said: 'This tax on jobs will be particularly hard for small and medium-sized companies as they have less flexibility to counter these increases and this is likely to affect companies' ability to scale up employment levels as required.'

However, 8% of respondents accepted that the increase was good news as it funded a better National Health Service for all. Among those polled were spread betting company IG Group, fashion chain Phase Eight and recruitment agency Angela Mortimer.